The Administrative Earnings Threshold for Universal Credit will rise from January 2023, from the equivalent of 12 hours to 15 hours a week at the National Living Wage, according to an analysis of the November 2022 Autumn Statement1. The change brings more claimants who are in work but on low earnings into a more intensive regime of work coach support1.
The threshold sits alongside a separate measure announced in the same statement. From September 2023, in a phased rollout, low earners will need to meet their work coach on a quarterly basis under what is called the In-Work Progression Offer1. That offer will mainly affect households whose income is typically between the equivalent of 15 and 35 hours a week at the National Living Wage, which the analysis puts at £365 a week for someone aged 23 and over1.
The National Living Wage itself was also announced to rise. The rates given are £10.42 an hour for workers aged 23 and over, a 9.7% increase; £10.18 for 21 to 22 year olds, up 10.9%; £7.49 for 18 to 20 year olds, up 9.7%; and £5.28 for 16 to 17 year olds and apprentices, up 9.7%1.
"This is in addition to the government's recent announcement to raise the Administrative Earnings Threshold from January 2023, from the equivalent of 12 hours to 15 hours at the National Living Wage, which will bring more claimants in-work and on low earnings into a more intensive regime of work coach support."
The same statement set out wider changes to benefits and costs, most effective from April 2023 unless stated otherwise1. The majority of benefits will be uprated by September's CPI figure of 10.1%, including Universal Credit, the state pension, Pension Credit minimum guarantee, Child Benefit and most tax credits elements1. The benefit cap will also rise by 10.1%, having not been changed since 20161.
| Benefit cap | New annual cap | Previous |
|---|---|---|
| Couples or people with children, inside London | £25,323 | £23,000 |
| Couples or people with children, outside London | £22,020 | £20,000 |
| Single people, inside London | £16,967 | £15,410 |
| Single people, outside London | £14,753 | £13,400 |
Source: entitledto.co.uk1
Cost of living payments were also confirmed: 8 million households on means-tested benefits will receive £900, paid in more than one instalment; 8 million pensioner households will receive £300; and 6 million people on non-means-tested disability benefits will receive £1501. The Household Support Fund will collectively provide local authorities with £1 billion for essentials1. The Energy Price Guarantee, which subsidises a typical household's energy bill to £2,500 a year, becomes £3,000 between April 2023 and March 2024, and continues to limit the price paid per unit of gas and electricity until March 20241. Households using heating oil, LPG, coal or biomass will receive a £200 payment this winter instead of £100, with all households in Northern Ireland receiving £2001.
Why it matters for households
The threshold change affects people already claiming Universal Credit while working limited hours. From January 2023, earning below the equivalent of 15 hours a week at the National Living Wage places a claimant in the more intensive work coach regime, where previously the line sat at 12 hours1. The quarterly work coach meetings follow from September 2023 for those earning between roughly 15 and 35 hours a week at that rate1. The practical effect is more frequent contact with the jobcentre for people whose earnings are already above the old threshold but below the new one.
Separately, the uprating and cap changes take effect from April 2023, and the energy support change runs from April 2023 to March 20241. The analysis notes that the timing of the cost of living payments had not been reported at that point1.
What happens next
The threshold rise takes effect from January 20231. The In-Work Progression Offer begins with a phased rollout from September 20231. The uprating, benefit cap and energy price changes take effect from April 2023, with the energy guarantee running to March 20241. The analysis also records delays to other measures: migration of most people claiming income-related Employment and Support Allowance to Universal Credit is delayed until April 2028, and a new housing element of Pension Credit will not take place until 20281.
For the rules on earnings and hours while claiming, see working while claiming. For the wider system, see the benefits hub.
Sources1 cited
- Autumn Statement update November 2022 entitledto.co.uk
Turn2usFree benefits calculator and grants search from a charity
Citizens AdviceFree advice on money, consumer and legal problems in England and Wales
GOV.UKOfficial information on tax, benefits and government services
MoneyHelperFree, impartial money and pensions guidance, set up by government